First half sales at speciality chemicals group Cognis dropped to around €1.5 billion, significantly lower than last year's €1.6 billion.
But organic growth was up slightly, by €3.4 million or 0.2 per cent, the company was keen to point out. Cognis continues to cite the influence of the weak US dollar as a major factor in its performance. The worsening exchange rate between April and June of this year has burdened sales of the company by -8.5 per cent, it claims.
Nutrition & Health, which has started a major marketing campaign for its Tonalin CLA brand, showed a 1.9 per cent growth, although with the currency impact and charges related to acquisitions and divestments, real sales dropped from €148.7 million to €140.5 million this year's first half. Tonalin contributed to sales for the first time and with the investment in the US market, the group will be aiming to see higher margins and sales for the unit in coming months.
Cognis is also trying to expand sales to the pharmaceutical industry, creating a new name for its range of pharmaceutical auxiliary substances, 'PharmaLine'.
As in the first quarter, the impact of exchange rates was particularly noticeable in the various regions. North America (sales of €383 million) and Latin America (sales of €76 million) experienced a 15 to 16 per cent drop in net external sales and the Asia-Pacific region (sales of €177 million) suffered a decrease of 10 per cent. In Europe, where the impact of the exchange rate is less relevant, sales decreased by 1.6 per cent, to €875 million.
Cognis is expecting little improvement in the second half, although its suggests that 'new market segments' will open up further growth.
"The consistent strategic concentration on our developing markets with the global trends of wellness and sustainability will also help us in the future. On this sector we have been able to increase our sales during the first six months of 2003 despite the difficult economic environment," said Joachim Söhngen, CFO of Cognis.